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Brussels, 28 November 2008
What is the problem?
The world is getting rapidly warmer, and there is an overwhelming consensus among the leading climate scientists that this is being caused mainly by carbon dioxide and other 'greenhouse gases' emitted by human activities, chiefly the combustion of fossil fuels and deforestation. These gases remain in the atmosphere for many decades and trap heat from the sun in the same way as the glass of a greenhouse.
Global warming is already causing changes in the world's climate and these will become increasingly severe unless urgent action is taken to reduce emissions. Last year's Fourth Assessment Report from the UN Intergovernmental Panel on Climate Change (IPCC), which represents the most authoritative and up-to-date global scientific consensus on climate change, concludes that the warming of the global climate system is "unequivocal" and accelerating. It points to a greater than 90% probability that increases in man-made emissions of greenhouse gases have caused most of the temperature increase seen since the middle of the 20th century.
The global average temperature has risen by 0.76°C since 1850, with Europe warming faster than the average, by almost 1°C. The past 13 years (1995-2007) have seen 12 of the warmest years on record. The rate of sea level rise has almost doubled from 18 cm per century between 1961 and 2003 to 31 cm per century in 1993-2003.
The IPCC projects that temperatures and sea levels will continue rising unless action is taken to limit greenhouse gas emissions.
Its best estimate is an additional temperature rise over the course of the 21st century of between 1.8° and 4.0°C, but in a worst case scenario the increase could reach 6.4°C. In historical terms, these are enormously rapid changes. Our civilisation has never been faced with a change in climate of anything like this magnitude. Even the lowest likely increase projected by the IPCC would push the world's temperature more than 2ºC above the pre-industrial level by the end of the century. This would take temperatures into the danger zone where irreversible and potentially catastrophic changes to the global environment become far more likely.
A further rise in average sea level of between 18 and 59 cm is anticipated this century. However, this range may be underestimated as the projections do not include the full effects of changes in ice flows.
What impacts is climate change already having and projected to have in future?
The warming of the global climate system is already evident in increases in average air and ocean temperatures, widespread melting of snow and ice, longer growing seasons and rising sea levels. The consequences of these changes include earlier spring peak water discharge into many glacier- and snow-fed rivers, lack of snow at low-altitude ski resorts and a polewards shift in the ranges of plant and animal species. There is also evidence of increased human death rates in Europe and Asia during prolonged heat waves.
There is strong scientific evidence that the risks of irreversible and possibly catastrophic changes in the global environment would greatly increase if global warming exceeds 2°C above the pre-industrial temperature. Examples of such possible changes include thawing of the Arctic permafrost, which would release huge quantities of methane gas into the atmosphere, or extensive melting of the Greenland and/or West Antarctic land-based ice sheets, which would raise sea levels by several metres in the long term (it is very likely that the melting of these ice sheets is already contributing to sea-level rise). The EU therefore takes the position that the objective of global action must be to keep the temperature increase within this 2°C limit.
The impacts of climate change are expected to become progressively more severe the higher temperatures rise. They are projected to include the following:
The regions likely to be most strongly affected by climate change are:
What about impacts in Europe?
Europe will not be spared. The IPCC expects nearly all European regions to be negatively affected by some future impacts of climate change and these will pose challenges to many economic sectors. Climate change is expected to magnify regional differences in Europe’s natural resources and assets.
According to the IPCC projections, the temperature in Europe may climb by a further 4-7°C this century in the absence of further global action to limit emissions of greenhouse gases.
Negative impacts across Europe will include increased risk of inland flash floods, and more frequent coastal flooding and increased erosion due to storminess and sea-level rise. The great majority of organisms and ecosystems will have difficulties adapting to climate change. Mountain areas will see retreat of glaciers, reduction of snow cover and winter tourism, and extensive species loss – in some cases of up to 60% by 2080 under high emission scenarios.
In southern Europe, climate change is projected to worsen high temperatures and drought in a region already vulnerable to climate variability. Water availability, hydropower potential, summer tourism and crop productivity in general are expected to be reduced. Climate change is also projected to increase health risks due to heat waves and the frequency of wildfires.
In central and eastern Europe, summer precipitation is projected to decrease, causing greater pressure on water resources. Health risks due to heatwaves are projected to increase. Forest productivity is expected to decline and the frequency of peatland fires to increase.
In northern Europe, climate change is initially projected to bring mixed effects, including some benefits such as reduced demand for heating, increased crop yields and increased forest growth. However, as climate change continues its negative impacts – including more frequent winter floods, endangered ecosystems and increasing ground instability - are likely to outweigh its benefits.
What can we do about climate change?
We have to act on two fronts simultaneously.
The first is to take urgent action to halt the rapid rise in global emissions of greenhouse gases and then reduce them sharply. As the projections contained in the IPCC's Fourth Assessment Report underline, this is essential if we are to prevent climate change from reaching very dangerous future levels that could change the face of the planet.
The EU is adamant that global warming must be limited to no more than 2°C above the pre-industrial temperature. This will require global emissions to peak within the next 10-15 years and then be cut by at least 50% of 1990 levels by 2050. These reductions are very ambitious but the IPCC report backs the European Commission's analysis that they are both technologically feasible – using clean technologies already available or in the pipeline – and economically affordable.
The second front is adaptation. All sectors of society need to adapt to climate change because it is already happening - and it will continue to get more severe until we succeed in bringing emissions under control. By adapting, we can cope more easily with climate change and minimise its adverse impacts by anticipating them. Examples of adaptation measures include strengthening sea defences to protect against future sea level rise and developing new types of crops that can grow even in drought conditions. The Commission has launched a debate on options for EU action on adaptation through its June 2007 Green Paper on the issue.
Adaptation is no substitute for mitigating climate change by reducing emissions. The two complement each other and together can significantly reduce the risks from climate change.
What are the expected costs of climate change - and of action to control it?
The economic costs of climate change - and the economic advantages of taking strong and early further action to control it - have been highlighted by the 2006 Stern Review of the economics of climate change, commissioned by the UK government.
The Review underlines that the benefits of prompt action to reduce emissions far outweigh the costs, and that the earlier action is taken the less costly it will be. It estimates that allowing climate change to continue unabated would eventually reduce global GDP by at least 5% and possibly as much as 20% or more per year. The higher of these figures would have a devastating economic and social impact on the same scale as the Great Depression or the two World Wars.
By contrast, action to stabilise greenhouse gas emissions at a level that would prevent climate change from reaching dangerous proportions would cost around 1% of GDP if taken swiftly, the Stern Rerview estimates. The cost – and the risk of failure - would rise the longer action was delayed.
Analysis by both the Commission and the IPCC supports this assessment and confirms that limiting global warming to 2ºC above the pre-industrial temperature is fully compatible with sustaining global economic growth.
Investment in a low-carbon economy will require around 0.5 % of total global GDP over the period 2013–2030, the Commission’s analysis shows. This would reduce global GDP growth by just 0.19 percentage points per year up to 2030, a fraction of the expected annual GDP growth rate of 2.8%. The IPCC puts the reduction in global GDP growth lower, at less than 0.12 percentage points a year up to 2050. Neither estimate takes account of the ancillary economic benefits of action such as greater energy security, reduced health costs and damage from avoided climate change.
These small decreases in annual GDP growth can be seen therefore as a modest insurance premium for significantly reducing the risk of irreversible damage from climate change.
What action is the EU taking to combat climate change?
The EU has long been leading international efforts to address climate change effectively. Preventing climate change from reaching dangerous levels is a strategic priority for the European Commission and EU Member States.
EU-level action is an essential complement to Member States' own efforts to reduce greenhouse gas emissions. Combating climate change is the first of the 6th Environmental Action Programme’s four priority areas and one of the main commitments made under the EU Sustainable Development Strategy. The need to reduce emissions is being progressively integrated into key EU policy areas such as agriculture, energy, regional policy and research.
Central to this work is the European Climate Change Programme (ECCP), launched in 2000. Under this umbrella, the Commission, Member States and stakeholders from business and industry, environmental groups, science and academia have identified a range of cost-effective policies and measures to reduce emissions and reviewed existing measures to see how they could also contribute.
Many of the policies and measures that have been identified are now being implemented, including legislative initiatives to promote renewable energy sources for electricity production, improve the energy performance of buildings and restrict emissions from fluorinated industrial gases with a powerful global warming impact. By far the most important cross-cutting measure developed under the ECCP has been the EU Emissions Trading System (EU ETS). Launched in 2005, this restricts CO2 emissions from some 11,000 energy-intensive installations in power generation and manufacturing industry (see MEMO/06/452).
While the first phase of the ECCP focused on developing measures to ensure the EU and Member States meet their Kyoto Protocol emission targets for 2008-2012, a second ECCP was launched in October 2005 to identify further cost-effective measures to reduce emissions up to and beyond 2012 and to develop strategies for adapting to climate change. This work has led, inter alia, to the proposal and decision to include aviation in the EU ETS (see IP/08/1114), the proposal for new fuel quality standards (IP/07/120), the proposal for a regulation on CO2 emissions from new cars (IP/07/1965) and the Green Paper on adaptation to climate change (IP/07/979).
In January 2007 the Commission proposed an integrated set of measures to establish a new energy policy for Europe focused on stepping up the fight against climate change, boosting the EU's energy security and competitiveness and putting Europe on the road to becoming a low-carbon economy.
The strategy sets ambitious targets for greenhouse gas emissions and energy use, to be met by 2020, which were endorsed by EU heads of state and government at their European Council meeting in March 2007. This decision has further cemented the EU’s international leadership on climate change and set the agenda for global action.
On greenhouse gas emissions, the EU is proposing that developed countries commit to reduce their collective emissions to 30% below 1990 levels by 2020. The EU has committed itself to doing so provided other developed countries agree to make comparable reductions under a new global climate treaty for the post-2012 period that is due to be concluded at the end of next year.
At the same time, and irrespective of the outcome of the negotiations on a new global climate deal, EU leaders have also committed the EU to reducing its greenhouse gas emissions by at least 20% below 1990 levels in order to start transforming Europe into a highly energy-efficient, low-carbon economy.
Underpinning these climate goals are related energy targets:
In January 2008 the Commission presented a major package of legislative proposals that are key to achieving these climate and renewable energy targets (IP/08/80). The package comprises proposals for:
- Strengthening and broadening the EU ETS from 2013 (MEMO/08/35)
- Sharing the emissions-reduction effort in non-ETS sectors among Member States (MEMO/08/34)
- Setting national renewable energy targets (MEMO/08/33) and the 10% target for renewable fuels in transport .
- Establishing a legal framework for the safe and environmentally sound use of carbon capture and storage technology (MEMO/08/36)
At the same time, the Commission adopted new guidelines governing the use of state aids for environmental purposes (MEMO/08/31).
Intensive negotiations between the Council and the European Parliament are under way with the aim of reaching a first-reading agreement on these legislative proposals, as well as the proposed legislation on CO2 emissions from new cars and on fuel quality, before the end of this year. It is hoped that political agreement among the Member States can be reached at the European Council meeting on 11-12 December and that the legislation can then be approved by the European Parliament at its plenary session starting on 15 December.
Agreement on the package will strengthen the prospects of concluding an ambitious new global climate treaty by furnishing proof to the rest of the world of Europe's determination to take bold action at home. Agreement is needed in December in order to ensure that formal adoption of the legislation can be completed before the European Parliament breaks for elections next June, otherwise the package could be significantly delayed.
To achieve the goal of cutting annual consumption of primary energy by 20% by 2020, the EU will have to intensify its actions related to energy efficiency. On 13 November the Commission put forward an Energy Efficiency Package (MEMO/08/699) as part of the EU Energy Security and Solidarity Action Plan (IP/08/1696). The Energy Efficiency Package proposes to strengthen the Directive on the energy performance of buildings by extending its requirements to more buildings and houses. It further includes proposals to extend the scope of the mandatory EU energy labelling scheme for domestic appliances and for a new labelling scheme for tyres to promote their fuel efficiency. The importance of cogeneration and of financing schemes to support investments in energy efficiency are also emphasised.
Meanwhile, minimum efficiency requirements and more demanding labelling classes will be introduced for a wide range of products through the directive on eco-design of energy-using products and the energy labelling scheme for domestic appliances, both of which are important elements of the Action Plan for sustainable consumption and production and sustainable industrial policy (IP/08/1154). Targetted products include TVs, light bulbs, washing machines, boilers or water heaters and motors.
Europe’s drive towards a low-carbon future is being further underpinned by the Strategic Energy Technology Plan launched by the Commission in late 2007 (see IP/07/1750)
What progress is the EU making in reducing emissions?
The EU’s greenhouse gas emissions are falling due to the combined impact of policies and measures resulting from the European Climate Change Programme, domestic action taken by Member States and the restructuring of European industry, particularly the transition to the open market economy in central and eastern Europe in the early 1990s.
These factors have enabled the EU to ‘decouple’ emissions from economic growth.
The 'EU-15' Member States reduced their collective emissions by 2.7% between the base year (1990 in most cases) and 2006 while the economy grew by more than 40% over the period. EU-25 emissions were down 10.8% over the same timeframe (IP/08/965). These reductions compare, for instance, with a 14.4% rise in US emissions between 1990 and 2006 as the US economy expanded by 59.7%.
Under the Kyoto Protocol the EU-15 are committed to reduce their collective emissions in the 2008-2012 period to 8% below base year levels. Latest projections from Member States indicate that this reduction will be achieved by 2010 through a combination of measures already taken, the purchase of emission credits from third countries and forestry activities that absorb carbon from the atmosphere. The implementation of additional policies and measures under discussion at EU and national levels would bring a further reduction of 3.3%, enabling the EU-15 to do better than its Kyoto target requires (see IP/08/1534 and Annex to this memo).
What international agreements are in place to fight climate change?
The United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol provide the international framework for combating climate change.
The UNFCCC, the first international treaty to specifically address climate change, was adopted in May 1992 and came into force in March 1994. To date 192 Parties – 191 countries and the European Community - have ratified it.
The Convention's goal is to stabilise greenhouse gas concentrations in the atmosphere at a level that prevents dangerous human interference with the climate system. It obliges Parties to establish national programmes for reducing greenhouse gas emissions and to submit regular reports. A number of global monitoring and reporting mechanisms are in place under the UNFCCC to keep track of emissions.
The Convention also encouraged industrialised countries to stabilise their greenhouse gas emissions at 1990 levels by the year 2000. The EU comfortably met this target.
The UNFCCC is based on the principle of ‘common but differentiated responsibilities and respective capabilities’. This recognises that while all countries have an interest in controlling climate change, the developed world should lead in reducing emissions since it is responsible for most of the historical build-up of greenhouse gases and also has greater economic resources to address the issue.
Parties to the UNFCCC meet annually to review progress and discuss further measures. Their next meeting will take place from 1-12 December 2008 in Poznań, Poland.
In December 1997 governments took a further step to address climate change by adopting the Kyoto Protocol to the UNFCCC.
Building on the UNFCCC framework, the Protocol sets legally binding limits on greenhouse gas emissions from 39 industrialised Parties including the European Community and the EU-15. It also introduces innovative market-based implementation mechanisms - the so-called Kyoto flexible mechanisms - aimed at reducing the cost of curbing emissions and funding clean development in developing countries.
Under the Protocol, industrialised countries are required to limit or reduce their emissions of six greenhouse gases: carbon dioxide (CO2), the most important and common gas, methane, nitrous oxide, and industrial gases called hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. The overall reduction required amounts to a cut of around 5% below the level in the chosen base year (often 1990), and is to be achieved during the Protocol’s first “commitment period” from 2008 to 2012. There are no specific emission targets for developing countries.
The EU-15 (the 15 countries that were members of the EU at the time of ratification of the Protocol in 2002) took on a commitment to reduce their combined greenhouse gases emissions to 8% below base year levels (1990 in most cases). Under the EU Decision to ratify the Protocol, this collective target has been translated into differentiated, legally-binding national targets for each EU-15 Member State, ranging from a reduction of 28% by Luxembourg to an increase of 27% for Portugal. Of the 12 Member States that have acceded since 2004, 10 have individual reduction commitments of 6 or 8% under the Protocol. Only Cyprus and Malta do not have Kyoto targets.
The Kyoto Protocol entered into force on 16 February 2005. So far 182 countries and the European Community have ratified it. Among developed countries that originally signed the treaty, only the US has not ratified. This means the Kyoto emission targets currently apply to 37 developed countries plus the European Community (EU-15).
What are the Kyoto flexible mechanisms?
The Kyoto Protocol creates three market-based mechanisms, known as the Kyoto flexible mechanisms: international emissions trading between governments with Kyoto targets, the Clean Development Mechanism and Joint Implementation.
The aim of these mechanisms is to allow industrialised countries to meet their targets cost-effectively while stimulating investment in, and the transfer of clean technology to, emissions-saving projects in developing countries and economies in transition. The rationale is that emission reductions have the same impact on the atmosphere regardless of where they are made, so it is sensible to make them wherever it costs least. Detailed rules and supervisory structures have been set up to ensure that these mechanisms are not abused.
Emissions trading can take place between countries with Kyoto targets, ie industrialised nations. Reflecting the emission targets agreed in Kyoto and under the internal EU agreement to share out the EU-15’s 8% reduction among Member States, each country has been assigned a fixed maximum amount of emission (in tonnes) for the 2008-2012 commitment period. Countries that emit less can sell their unused emission units to others that emit more. This will allow reductions to take place where they are cheapest, reducing compliance costs.
Inspired by this model, the EU has developed and implemented its own company-level emissions trading system, the EU Emissions Trading System (EU ETS). This ‘cap and trade’ system, launched on 1 January 2005, covers all 27 EU Member States and is the first and biggest international company-level emissions trading system in the world (see (MEMO/08/35). It has rapidly become a major driver behind the expansion of the global carbon market.
The Clean Development Mechanism (CDM) and Joint Implementation (JI) allow industrialised countries to achieve part of their emission reduction commitments by investing in emission-saving projects abroad and counting the reductions achieved toward their own commitments.
JI covers projects in other industrialised countries with Kyoto targets, while CDM projects are carried out in developing countries. The two mechanisms lower compliance costs for developed countries at the same time as channeling investment and clean technologies to developing countries and economies in transition, thereby supporting their sustainable development goals.
CDM credits can be generated retroactively, from 2000 onward, while JI credits are generated during the 2008-2012 period. A condition for the issue of credits is that the projects result in real, measurable and long-term emission savings that are additional to what would have happened otherwise. Several EU Member States intend to buy CDM and JI credits to help them meet their Kyoto targets. Collectively they have budgetted €2.95 billion to do so.
The EU ETS is driving the expansion of the global carbon market because it is linked to CDM and JI. Companies participating in the EU ETS can use credits from most types of CDM projects and from JI projects to offset their emissions in the same way as they use emission allowances. This link is channelling investment in CDM and JI projects by European companies, in addition to the purchases planned by governments.
What would happen if a country missed its Kyoto emissions target?
The compliance regime for the Kyoto Protocol is among the most comprehensive and rigorous in the international arena. If a Party fails to meet its emissions target, the Protocol requires it to make up the difference plus a further 30% as a penalty in the second commitment period (after 2012). It must also develop a compliance action plan, setting out the actions that it will take to meet the target and the timetable for doing so. In addition, its eligibility to participate in the Protocol’s international emissions trading system will be suspended.
For the EU-15 Member States, the Kyoto Protocol compliance procedures would apply if the EU-15 as a whole missed its 8% reduction target. Should this occur, each Member State would be held to its target set out in the Decision to ratify the Protocol and the Community would be considered non-compliant.
The remaining 10 Member States with Kyoto targets (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) are bound to their individual targets as set out in the Protocol, both under the Protocol’s non-compliance procedures and under EU law.
Member States are committed under EU law to meet their targets, which are enforceable by the Commission through the infringement procedure.
What will happen after Kyoto's first commitment period?
The Kyoto Protocol’s first commitment period – the period during which the EU and other developed countries must meet their targets for limiting or reducing emissions – expires at the end of 2012.
After two years of informal talks on possible future action, Parties to the UNFCCC agreed at the UN climate change conference in Bali, Indonesia in December 2007 to launch formal negotiations on a new global climate agreement covering the period after 2012. They also set a time and place for concluding the future agreement: December 2009, at the UN climate conference to be held in Copenhagen.
Furthermore, the Bali conference agreed a ‘Bali Action Plan’ to guide the negotiations between UNFCCC Parties. The Bali Action Plan sets out the key building blocks of the future treaty. These are:
i. Enhanced mitigation of climate change by limiting or reducing emissions. The action plan envisages commitments or actions by developed countries which could include quantified objectives for limiting and reducing emissions. Developing countries will also take action, but in their case no reference is made to quantified emissions objectives.
ii. Adaptation to climate change;
iii. Action on technology development and transfer; and
iv. Scaling up of finance and investment to support both mitigation and adaptation.
The decision to launch negotiations explicitly acknowledges the findings of the IPCC’s Fourth Assessment Report (AR4) and recognises that deep cuts in global emissions will be required to reach the UNFCCC’s objective of preventing dangerous levels of climate change.
In parallel with these negotiations under the UNFCCC, the Parties to the Kyoto Protocol are negotiating new post-2012 emissions targets for developed countries that are members of the Protocol. The idea is that these two separate negotiating ‘tracks’ will be brought together in a single package at Copenhagen.
Three negotiating sessions (all covering both tracks) have been held so far: in March (Bangkok, Thailand), June (Bonn, Germany) and August (Accra, Ghana). The fourth and final session of this year will be the UN climate change conference taking place from 1 to 12 December in Poznań, Poland.
What is the EU’s vision for a post-2012 agreement?
The 'shared vision' of the future agreement should be to reduce global greenhouse gas emissions sharply while helping developing countries, through technological and financial support, to develop along a low-carbon path and to adapt to the impacts of climate change which are now inevitable.
In view of the scientific evidence from the IPCC and others, a key element of the shared vision must be to limit the global average temperature increase to no more than 2ºC (3.6ºF) above the pre-industrial level. This will require global emissions to peak by 2020 and then be reduced by at least 50% of 1990 levels by 2050. These reductions are very ambitious but the IPCC’s Fourth Assessment Report last year backs the European Commission's analysis that they are both technologically feasible – using clean technologies already available or in the pipeline – and economically affordable.
For the EU, the other key elements of the future treaty are as follows:
The Copenhagen agreement will need to be underpinned by a deal on financing for clean development that helps to ensure that the substantial finance and investment streams necessary to tackle climate change, and in particular for developing countries, will be available. This financial support will have to be differentiated according to the financial capability of developing countries.
What are the EU's priorities and expectations for the Poznań climate conference?
The Poznań conference is an important opportunity to take stock of negotiations so far, step up their pace and make further progress, and lay a solid basis for the final year of negotiations leading up to Copenhagen.
The Poznań Conference is actually a combination of six parallel meetings:
The key results the EU will be pressing for are:
The high-level segment of the conference will focus on developing the shared vision and how to finance the future agreement. It will be preceded on 8-9 December by an international meeting of finance ministers in Warsaw.
With a global consensus already reached that the new treaty must tackle tropical deforestation - the source of some 20% of global emissions - the European Commission will be promoting its recent proposals to halve gross tropical deforestation by 2020 and halt global forest cover loss by 2030. It proposes, among other things, establishing a Global Forest Carbon Mechanism to help developing countries (see IP/08/1543).
In addition, the conference should see progress on several practical pilot initiatives, such as the World Bank's Forest Carbon Partnership Facility, and the launch of new ones such as the World Bank's Climate Investment Funds for mitigating emissions and adaptation in developing countries as well as a demonstration programme for carbon capture and storage technologies. Some of the new initiatives have been developed under the auspices of the G-8.
The European Commission will present progress on the Global Energy Efficiency and Renewable Energy Fund (GEEREF) (see IP/08/473), the Global Climate Change Alliance (GCCA) (IP/07/1352), and the International Partnership for Energy Efficiency Cooperation set up under the G-8 in June (MEMO/08/380).
The Commission and the French EU presidency have also organised a programme of some 80 public side events at which the EU Member States and Institutions will present latest policy approaches and research findings relevant to climate change.
Poznań side-events programme:
Projected emissions in 2010 compared with base year